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Challenges and Opportunities for Modular Construction in Canada

Workshop Summary Report

Hosted jointly by Concordia University and the Modular Building Institute

in collaboration with Canadian Construction Innovations and the University of Alberta

October 29-30, 2015

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Workshop Report: “Challenges and Opportunities for Modular Construction in Canada”

TABLE OF CONTENTS

1. Executive Summary

2. Keynote

3. Panel Discussions

3.1 Industry 3.2 Academic

4. Round Table Discussions

4.1 Topic: Negative Stigma And Marketing

4.2 Topic: Lack Of Evidence Of Past Success 4.3 Topic: Standards And Regulations 4.4 Topic: Procurement Strategies

4.5 Topic: Project Financing 5. Summary and Recommendations

6. Additional Resources and Related Information

Appendix A List of Attendees

Appendix B Program

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1.0 EXECUTIVE SUMMARY

The on‐site building method currently prevalent in construction is laden with issues such as inefficiency,

resource waste, a large carbon footprint, and health related issues for workers and nearby residents.

The processes employed limit productivity improvements and opportunities for innovation in

construction. Industrialization of the building process, referred to here also as modular or offsite

construction, reduces cost, construction time, and waste. It is also capable of improving productivity,

quality, and safety on construction jobsites. Although the industrialized building approach may be beneficial to many entities, including owners

(private and public), institutions responsible for schools and hospitals, general contractors, and

architectural/engineering organizations, the adoption of this approach, in particular in publicly funded

building, is limited due to several issues, such as the following:

1. Negative stigma: There is a negative stigma associated with modular and offsite

construction, as well as misconceptions that modular construction is of lower quality and is

intended primarily for temporary, single‐storey buildings.

2. Shortage of examples of past success: There is a lack of evidence and awareness of

successful implementation of modular construction utilizing mixed use of concrete, steel,

masonry, and wood for mid‐rise and high‐rise building projects.

3. Standards and regulations: The existing building code, bylaws, and operational standards are

systemically more conducive to conventional construction practices.

4. Procurement strategies that favour conventional construction technologies: At present, the

dominant practice for public procurement is for projects to be awarded to the lowest

bidder. A value‐based system for procurement may create new opportunities for modular

construction, which provides advantages that conventional construction cannot offer.

5. Project financing: Current practice involves progress‐based financing of projects, which

inherently favours conventional construction: Public project owners recognize that modular

builders will invest significant resources on a product upstream prior to onsite assembly

(i.e., when the product is still in the factory or in storage, thus creating a cash flow challenge

under the current system), and poses the need to restructure project financing and

streamline cash flow for publicly‐funded projects to enable the use of modular.

More communication and collaboration is needed in order to overcome these obstacles. In recognition

of this need, Dr. Osama Moselhi, of Concordia University, alongside the Modular Building Institute (MBI),

and in collaboration with the University of Alberta and Canadian Construction Innovations (CCI), hosted

a workshop titled “Challenges and Opportunities for Modular Construction in Canada,” on October 29‐

30, 2015. The workshop was funded by NSERC through its Connect program, and additional sponsorship

was provided by Canam Group Inc.

The workshop commenced with a reception and banquet dinner featuring a keynote lecture presented

by Dr. Mohamed Al‐Hussein, Professor of Civil and Environmental Engineering at the University of

Alberta and Industrial Research Chair in the Industrialization of Building Construction. The following

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Workshop Report: “Challenges and Opportunities for Modular Construction in Canada” morning opened with a keynote address from Dr. Amir Asif, Dean of the Faculty of Engineering and

Computer Science at Concordia University, after which a series of panel discussions began. The first

panel to present was comprised of attendees from industry, each of whom spoke briefly on challenges

and opportunities that they have observed in their respective sectors in relation to modular

construction. The second panel was academic, and members presented and discussed their research

and how it relates to challenges and opportunities in offsite construction.

The panel discussions wrapped up with an open question and answer period, which was then followed

by lunch. During lunch Steven Williams, Operations Director of MBI, and partner in the workshop, spoke

regarding the work of MBI and efforts to promote the modular industry.

Following the luncheon, session attendees were divided into five groups and were given specific topics

for a round‐table discussion. After an hour of problem‐solving and dialogue, each table in turn

presented the results of their analysis. Once each group had shared their efforts, an open discussion

between attendees took place, until the workshop concluded.

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2.0 KEYNOTE ADDRESS: Dr. Mohamed Al‐Hussein

Dr. Mohamed Al‐Hussein is a professor and Industrial Research Chair (IRC) in the Industrialization of

Building Construction at the University of Alberta, and was recently appointed Director of the newly

established Nasseri School of Building Science and Engineering. He is a recognized leader in modular

construction and a highly sought researcher and consultant in the areas of lean manufacturing,

construction process optimization, CO2 emission quantification, and building information modelling

(BIM), with the development of modular and offsite construction technologies and practices forming the

hub of his research. Dr. Al‐Hussein’s research has developed best practices for panelized building

systems, lean production, and modular construction. He presented his utilization of modular

construction to build five 3‐storey student dorms at a Pennsylvania college in just 10 onsite working

days. Dr. Al‐Hussein highlighted examples of his applied research in the area of modular and offsite

construction, including several mid‐rise multi‐family residential facilities, such as a 68‐unit apartment

building for which on‐site assembly of modules was completed in just two days. He briefly presented his

recent experience with Alberta Infrastructure and the difficulties encountered in the preparation of a

request for proposals related to modular construction and how it could allow for good number of

bidders and help achieve owners specified needs. Dr. al‐Hussein shared the early findings of a recent

workshop held for that matter.

Dr. Al‐Hussein’s IRC focuses primarily on seven research objectives:

i. Improve construction productivity through innovative manufacturing technologies.

ii. Improve the productivity of design and drafting for manufacturing (DDFM) that encompass the

integration of the design process and the machine language.

iii. Develop mathematical algorithms to optimize material usage and minimize waste.

iv. Quantify and minimize CO2 footprint of the construction process.

v. Assess occupational health and indoor air quality in order to control and mitigate risk.

vi. Improve urban design and planning.

vii. Develop a BIM‐based planning process to minimize rework and material and process waste.

He also pointed out that his research is conducted in conjunction with several industry partners,

providing new and innovative solutions to real‐world issues, and significantly advancing the state of the

modular and off‐site construction industry within Canada.

The Keynote address of Dr. Amir Asif, Dean of Engineering and Computer Science at Concordia

University was delivered in the morning of the following day.

Amir Asif is Dean of the Faculty of Engineering and Computer Science at Concordia University and

professor with the Department of Electrical and Computer Engineering. An emerging voice among

engineering leaders, Dean Asif is rethinking how to unlock the full potential of the engineering

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Workshop Report: “Challenges and Opportunities for Modular Construction in Canada” profession through academic innovation and by addressing the systemic issues that have been holding it

back. He stressed how modular construction can be of help not only for expanding the global market for

Canadian construction but also to the development of the Canadian north. More details are included

later in Section 6.

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3.0 PANEL DISCUSSIONS

Panelists were invited to make a ten to fifteen minute presentation highlighting issues pertaining to

efficient utilization of modular construction within their respective areas of expertise, speaking to

opportunities that are available, and difficulties that currently exist. The panelist presentations were

followed by questions and focused discussions.

3.1 INDUSTRY PANEL DISCUSSION

The industry panel presentations represented the organization of construction project stakeholders:

owners, architects, engineers, fabricators, and contractors, respectively. Gilles Bernardin, Site Manager

for Defence Construction Canada (DCC) on the Canadian Forces Base at Petawawa represented owners,

and was followed by Martin Tite, a Principal at GRC Architects, speaking as an architect and designer.

Representing fabricators was Laurie Roberts, Vice President of Sales and Marketing at NRB Off‐Site

Construction; following her, from the perspective of fabricators and constructors, was Tony Begin,

Senior Director of Integrated Project Delivery (IPD) from Canam Group Inc.; and finally, Peter Lister, Vice

President of Forest Operations and Wood Products at FPInnovations, spoke as a supplier.

Speaking from the perspective of the owners (whom DCC represent), Mr. Bernardin cited a series of

successful modular projects that were implemented at the Canadian Forces base in Petawawa. A new

program at the base demanded an increase in housing, and DCC responded by bringing in 68 modular

units comprising duplex and four‐plex residences. The project was delivered without changes, on time,

and the client is overall very satisfied with the results. The Forces base also uses modular construction

for temporary office space projects, and a complex for dental and health facilities. These projects follow

the design‐built project delivery system, allowing DCC to provide a data sheet and performance criteria,

and then the modular companies continue the project on to completion. Modular has been used on the

base for similar projects for approximately ten years; however, there are difficulties that prevent the

expansion of modular as a solution for customized and more complex projects, which comprise a much

larger portion of new construction on the bases.

One difficulty is the existing financial structure. Typically, there is a budget given that must be

completely used up within a calendar year, which usually works to the advantage of modular projects

where there is many of the same kind of unit; however, all DCC projects require a competitive bidding

process. This competitive bid must have multiple local manufacturers, which are not readily available,

and an architect must also create a standard on‐site/stick‐built spec in order to compare modular

manufacturers. Another financial difficulty is due to public projects requiring a highly detailed financial

breakdown—to within ten percent of the total cost of each line item, which is problematic for

customized offsite work.

The largest challenge for Canadian Forces public projects is security requirements. The guidelines for

construction near an operational zone are very strict; for example, the entire facility must be built by

security‐cleared workers. For factory construction, this potentially means security clearing all

employees, as well as full plant inspections. These requirements may create huge delays in project

delivery—not possible with the budget turnaround requirements.

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Workshop Report: “Challenges and Opportunities for Modular Construction in Canada” A question for the panel was raised about whether the choice to look at modular as a potential answer

for DCC project needs was generated by the owners, or architects and industry, etc. Mr. Bernardin

replied that unless representatives of the owners (or the owners themselves) request modular, it is not

provided as a solution, perhaps because the industry lacks required expertise.

Martin Tite (GRC Architects) presented a design and architecture perspective, speaking as someone who

has used modular and offsite construction in a few instances, but more typically works within

conventional construction methods. He presented a brief historical survey of important architectural

works that were modular or offsite in nature—beginning more than 150 years ago. This longstanding

use of modular and offsite construction implies that there are no glaring inherent technical obstacles

preventing its use as a popular building method, so the difficulty probably lies in culturally embedded

issues.

Part of the issue is that modular construction is often viewed as being in competition with conventional

construction. The two systems of construction have their own best fit applications, but currently the

industry is biased towards conventional construction, and from a design perspective this is partly

because it is scalable, works with almost all supply chains, and is completely customizable and

compatible with renovation and addition. The reason that typical on‐site construction is so versatile and

prevalent is largely due to the fact that it is in such high demand compared to the demand for modular

construction—if the market were to change so that modular were more popular, it can be assumed that

suppliers and trades would fill in the gaps.

Issues that must be addressed include the education of designers, engineers, and trades so that modular

and offsite emerges as a potential choice. Also, modular construction as it exists may be an impediment

to renovation and addition, for example when the engineered modular system cannot take on any load,

or when additions are limited to the same suppliers or highly custom pieces.

There are many opportunities, however, as modular has in the past been a driver of the aesthetics of a

building and can be used in situations when a conventional method of construction is not possible due

to time or location constraints, etc.

Following Martin was Laurie Robert, Vice President of Sales and Marketing at NRB Inc., a modular

building design and construction company based out of Ontario.

At present, the largest opportunity for the modular construction industry is to increase market share. In

the commercial construction industry, modular construction currently represents only 2.34% of the total

market. The National Institute of Building Sciences (NIBS) began an offsite construction council in 2013

in response to this disparity, and conducted a survey in order to rate the barriers that hinder the

implementation of offsite construction. The barriers were determined as follows:

1) Design and construction culture

2) Distance from factory to site (because transportation greatly increases cost)

3) Lack of knowledge about modular in the construction industry

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Workshop Report: “Challenges and Opportunities for Modular Construction in Canada” Transforming perceptions of modular construction is vitally important in order to increase the market

share. The general public tends to associate modular construction with only temporary buildings, e.g.,

trailers, and there must be an increased understanding that modular construction is a method that can

produce equally excellent permanent structures.

A key to the success of modular construction projects is project integration, with cooperation from all

stakeholders, including owners, design professionals, construction managers, and general contractors,

etc. The modular process requires buy‐in and understanding from all parties at an early stage because it

differs from conventional construction, for example, in scheduling, sequencing, and scope. On projects,

the modular company must be engaged up front in order to educate all parties about the process, and

bring an understanding of the issues that are unique to modular construction such as the order of

assembly, moving fabricated modules, and that the footprint of the modules must be decided and

designed very early, etc.

Other hurdles to the adoption of modular construction include financing structures (for example, is a

module property or equipment?), as well as shipping of the modules. Transportation is a presently a

large hurdle as it restricts the modules in terms of width, height, structure, and weight, it also depends

on site access, and can comprise a large portion of the budget.

A very important message that must be communicated is not only the availability of modular solutions

for permanent structures, but also the need to engage modular companies and all parties early in the

process, to protect against scope gaps or creep, and for all roles and responsibilities to be

communicated clearly.

Tony Begin spoke from the perspective of a fabricator and lead constructor, as the Senior Director of IPD

of Canam Group Inc., a large steel fabrication company.

A past project that successfully utilized the modular system was presented in order to demonstrate how

modular construction addresses inefficiencies that are common in conventional construction; for

example, there are far fewer people required on‐site during assembly, and the schedule can be much

tighter.

Canam’s experience working with modular and the construction industry led them to change their

strategy away from marketing a product to marketing a range of preconstruction services. This involves

meeting owners very early in the process and promoting an integrated project delivery process. It is just

as important to sell the process of modular construction as it is to sell the modules.

Part of this shift from promoting a product to promoting an integrated service involves finding tools and

technologies that support this process. Canam uses virtual construction models and BIM modelling as

part of the integrated services they provide, and are cultivating an expertise in these areas in order to

augment the process and add value for clients.

Peter Lister, Vice President of Forest Operations and Wood Products at FPInnovations, was the final

industry panelist. FPInnovations is a private, not‐for‐profit organization with a mandate to support the

advancement of technology in the wood sector and promote research by bringing together industry,

government, and academia. They also work to bring new products to market, and to change legislation,

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Workshop Report: “Challenges and Opportunities for Modular Construction in Canada” such as height restrictions on wood buildings and increasing the number of applications available for

forestry products.

FPInnovations works to develop new products and techniques by working in conjunction with both

government and private sector companies. Working cooperatively with legislative bodies to change

regulations is essential, and has allowed the wood industry to expand into new areas; for example, code

restrictions for allowable heights in wooden buildings has changed from four to six storeys after

research findings were presented to governing bodies, and now the number of wood‐framed six‐storey

buildings has greatly increased.

New opportunities for modular construction are available, and will continue to increase with more

research, communication, and advocacy.

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3.2 ACADEMIC PANEL DISCUSSION

The academic panelists assembled from universities across Canada and the United States, and

represented a wide scope of research applications related to the modular building industry, from

residential offsite construction, to production and onsite assembly, to project delivery systems, to

offshore heavy industry, to automation in construction progress tracking. The presenters were asked to

discuss their work, and share their views on the industry collaborative research necessary to help

advance modular construction. The academic panelists were: Dr. Neil Eldin, Professor and Chair of the

Department of Construction Management from the University of Houston; Dr. Jeff West, Associate

Professor from the University of Waterloo; Dr. Raymond Issa, Professor and Director, Center for

Advanced Construction Information Modeling, University of Florida; Dr. Simaan Abourizk, Professor and

Industrial Research Chair in Construction Engineering and Management from the University of Alberta;

and Dr. Mohamed Al‐Hussein, Professor, and Industrial Research Chair in the Industrialization of Building

Construction from the University of Alberta.

Dr. Neil Eldin, from the University of Houston, was the first panelist to speak. His research focus has

been modular construction in offshore oil and gas projects, where the offsite process has been

employed for decades. There are key lessons to be learned from offshore construction, as there have

been roughly three iterative generations of modular used in oil and gas.

The first generation of modular consisted of basic components, such as simple modules, pipe racks, and

other structural elements. From there the industry progressed to add some equipment to the module,

and preassemble units. The third, and current generation of this offshore construction involves

designing the modules around the equipment, and shipping largely completed units to site. The majority

of piping and insulation are installed, and some electrical and instrumentation equipment are in place

before the modules leave the factory.

This process can be learned from and implemented in on‐shore modular construction as well, as there

are parallels with HVAC equipment and the oil and gas equipment, which can be designed and

integrated into the module from the start, and the lack of concrete foundations in some offshore

projects demonstrates innovative structural solutions that can be employed.

Challenges currently faced by the modular industry mirror the challenges that the offshore industry has

encountered in the past such as a lack of integrated design processes, costly logistical problems, etc. The

on‐shore modular industry should look to offshore and heavy industry for potential solutions.

Dr. Jeff West, professor at the University of Waterloo, spoke regarding his research in automated

construction progress tracking and tolerance detection.

The challenges that modular construction is currently facing include the impediments to innovation

presented by existing standards and regulations, which are biased toward conventional construction

methods. There must also be an increase in coordination between the design, engineering, and

fabrication sides of projects, which is currently not the industry standard. Another major factor is that

transportation and handling can greatly influence the loads that modules encounter, meaning that the

module must be designed properly from the outset.

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Workshop Report: “Challenges and Opportunities for Modular Construction in Canada” The research being done at the University of Waterloo involves a number of initiatives: tolerance

management, and integrating tolerance controls in manufacturing and construction; risk‐based analysis

and decision strategy for project planning; and, the development and use of 3D imaging technologies.

The manufacturing industries that lie outside of construction (e.g., automotive, etc.) tend to have very

highly developed tolerance management systems, often utilizing the concept of inverse kinematics, a

technique utilized in Dr. West’s research. The modular construction industry may look to these other

industries for such systems to apply to offsite construction. The research goal is to develop processes

that will allow realistic levels of tolerance to be incorporated into modular construction manufacturing

practice by first identifying the types of tolerances and then establishing the relationships between

fabrication cost and project risks, and coming up with a problem solving strategy.

This type of research is vital for the modular construction industry to control cost by optimizing the fit of

imperfect modules or assemblies, engineering tolerance controls for both the final assembly and the

transportation of parts, and to design connections that balance the efficiency of construction with

structural requirements. The research incorporated a framework for tolerance accumulation and the

characterization of risks specific to modular construction, in order to find the optimal tolerance for

modules. Using 3D scanners, the researchers compare built modules with their digital designs, and then

conduct comparison analysis to understand deviations in the built structures. Once geometric

discrepancies between designed and built components are captured, inverse kinematics are employed

to develop realignment strategies for corrections. Currently, this technology exists in non‐construction

manufacturing industries, but could prove useful in offsite projects.

Dr. Raymond Issa, Professor at the University of Florida and Director of the Center for Advanced

Construction Information Modeling, spoke on the challenges and opportunities facing modular

construction, and his research in manufactured construction methods.

It is vital that all parties involved in the construction process have a thorough understanding of the

logistical peculiarities of modular construction in order to have an effective execution plan for

prefabricated buildings. These include shipping and hauling, crane erections and labour, waterproofing

components, and finishing on‐site, and other processes that can differ from conventional construction.

These differences require a change in the mindset of involved parties, including whichever authority has

jurisdiction, and the owners.

Many of the changes that are necessary for the success of the modular industry occurred in other

industries only when there was sufficient market demand. The modular industry, therefore, must create

a marketing plan in order to increase demand to the point that it is profitable to undergo the necessary

changes.

Dr. Simaan Abourizk, a Professor at the University of Alberta and Industrial Research Chair in

Construction Engineering Management, spoke regarding his research experiences with modular

construction.

There are examples of very successful modular construction projects in industrial applications in Canada,

for example the Diavik Diamond Mine project. One of the reasons that modular was such an ideal

solution for the Diavik Diamond Mine project was because there exists no infrastructure on site, which

means that all aspects of the project must be planned out in advance, which is easier to control with

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Workshop Report: “Challenges and Opportunities for Modular Construction in Canada” factory‐based construction. Modular construction has been so successful in applications such as this that

Alberta currently has the largest total combined area set aside for modular assembly yards in North

America. The popularity of offsite construction in industrial applications has also instigated a lobbying

effort on behalf of the modular industry to change load constraints for transportation.

Other applications that have seen huge success with the use of offsite construction, which include

automotive and shipbuilding industries, have benefited greatly from the standardization of methods and

products. While many projects themselves are custom, there could be a great increase in the number of

standards and best‐practices used in the field—for example, the use of pipe racks is very widespread,

and they all serve roughly the same purpose, but there is little agreement on what exactly this piece of

equipment should look like.

Dr. Mohamed Al‐Hussein, a Professor at the University of Alberta and Industrial Research Chair in the

Industrialization of Construction, spoke regarding the difficulty in bid processes and also the success of

factory built‐projects.

Alberta Infrastructure (AI), a government body responsible for constructing and maintaining many of the

public buildings in Alberta, recently contacted Dr. Al‐Hussein to work with them to review their bidding

process. AI found that they were only receiving a handful – one or two – eligible bids for some of their

large School Board projects, and want a more competitive process. Their bid spec was reviewed and in a

collaborative process with local modular building companies problems were identified and suggestions

for changes made. The process demonstrated several problems that are common in the modular

construction industry. First, AI, as the owners, did not have sufficient knowledge of the modular

construction process to write a bid package that allows for more than one company to bid. Timelines

specified in the bids did not fit the modular process, and capacity requirements don’t take into

consideration yard space and other storage requirements unique to modular buildings. The costs of

transportation were also not adjusted according to the location of the project, resulting in large

variability in bid pricing.

The bid package for AI’s School Board projects will be revised, and they are now hoping to examine the

bid package for Courts. The collaborative process that brought together owners and builders was very

successful, and should be emulated in other projects.

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4.0 ROUND TABLE DISCUSSIONS

Workshop attendees were divided into five groups, with an effort to ensure a good mix from academia and industry.

Each group was provided with a topic related to challenges within modular and offsite construction. The groups were

then asked to brainstorm and identify the causes and effects that may lead to substandard performance under their

assigned topic, as well as key research, development, and educational needs that could potentially address the issues.

4.1 TOPIC: NEGATIVE STIGMA AND MARKETING

There is a negative stigma associated with modular and offsite construction, as well as misconceptions that modular

construction is of lower quality than traditional on‐site, and that it is intended primarily for temporary single‐storey

buildings. This group was requested to:

Discuss the realities of this stigma and how it affects the adoption of modular construction—for example, does it affect

who target audiences are? Do businesses need to take on the challenge of re‐orienting customer expectations? In what

ways can research contribute to informing the public?

Comments:

There is a significant difference between the expectations of “what a house is supposed to be” and what modular

construction is marketed as. The majority of owners don’t care about the means and methods by which their building is

constructed, just the effectiveness of the process and the end product.

In an effort to increase market demand and awareness there needs to be more advocacy, similar to the adoption of

LEED and “green” building technologies, which became a desirable feature for homeowners. There is also a need for

more success stories, and for the modular process to be part of the home buying experience, e.g., when homeowners

are permitted to tour fabrication factories and assembly yards, etc.

A setback to having a large scale marketing push is that many modular suppliers cater to their local areas only, and

investing in partnerships and awareness initiatives outside of that are not seen as very profitable.

4.2 TOPIC: LACK OF EVIDENCE OF PAST SUCCESS

There is a lack of evidence and awareness of successful implementation of modular construction utilizing mixed use of

concrete, steel, masonry, and wood for mid‐rise and high‐rise building projects. This group was requested to:

Discuss how a lack of evidence of past success affects the adoption of modular construction—for example, why is there a

lack of readily available evidence, despite the widespread implementation of modular and offsite construction? What

roles do industry and academia play in overcoming this difficulty?

Comments:

This issue is related to procurement strategies as well as standards and regulations. Many new building technologies

have been proliferated after a publicly sponsored, large‐scale project is undertaken; smaller projects often don’t have

the capability to overcome obstacles such as bidding, dealing with workforce regulations, etc., and much of the effort

needs to be done up‐front, which is a large cultural shift for the construction industry. It is also better if there are

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Workshop Report: “Challenges and Opportunities for Modular Construction in Canada” government sponsored case‐study projects as it is difficult for those in the industry to bear the burden of acting as a

“guinea pig” for new technologies.

Much of the problem with the “lack of evidence” is not a lack of examples, but a lack of proliferation, which is why large

projects make a good first step. Other sectors and countries also have many different places where the public can view

innovative technologies such as the innovative case studies of FPInnovations that demonstrates different wood

technologies.

There is also a lack of scientific data and research. A great deal more research is needed in modular housing.

4.3 TOPIC: STANDARDS AND REGULATIONS

The existing building code, bylaws, and operational standards are systemically more conducive to conventional

construction practices. This group was requested to:

Discuss and provide specific examples of the ways in which legislation and regulations are oriented to favour traditional

on‐site construction over offsite and modular, and discuss means for overcoming these difficulties. For example: Who are

the stakeholders who may be able to adjust standards and regulations? How can both academia and industry work to

overcome such challenges?

Comments:

The issue may not necessarily lie with the system, i.e., there are no rules that make it illegal to build modular, but

modular and offsite construction is outside the current building tradition within which inspectors, regulators, owners,

etc., operate. There are also secondary regulations that affect the modular construction industry. Transportation

regulations can greatly affect the cost, design, timing, etc., of a project, especially when companies are operating across

several jurisdictions that may have different rules between them. There are also regulatory bodies such as warranties,

WCB, etc. All of these affect modular, and most problems arise due to the fact that offsite construction differs from

standard procedures, and while not being prohibited, it often does not fit the standards and regulations in the same way

as traditional methods.

4.4 TOPIC: PROCUREMENT STRATEGIES

At present, the dominant practice for public procurement is for projects to be awarded to the lowest bidder. A value‐

based system for procurement may create new opportunities for modular construction, which provides advantages that

conventional construction cannot offer. This group was requested to:

Discuss the existing procurement strategies that do not fit offsite and modular construction. Discuss how procurement

strategies can be changed to allow for modular and off‐site construction bids. For example: What potential difficulties

and roadblocks are there with implementing such a strategy? Would new procurement strategies promote joint ventures

(e.g., between manufacturers and general contractors)?

Comments:

Issues with procurement lie in the blending of manufacturing and building construction: is a modular built house

equipment, or is it property? Agreements between stakeholders need to be very clear on which points in the

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Workshop Report: “Challenges and Opportunities for Modular Construction in Canada” construction process indicate a change in ownership. There needs to be a system that allows for progress draws while

the building is still in the factory.

Another issue is bidding processes that have specs originated with conventional construction in mind. The strategy used

to execute a project should be established up front—because the two modes of building differ so much.

4.5 TOPIC: PROJECT FINANCING

Current practice involves progress‐based financing of projects, which inherently favours conventional construction.

Public project owners recognize that modular builders will invest significant resources on a product upstream prior to

onsite assembly (i.e., when the product is still in the factory or in storage, thus creating a cash flow challenge under the

current system), and poses the need to restructure project financing and streamline cash flow for publicly‐funded

projects to enable the use of modular. This group was requested to:

Discuss examples of project financing barring the implementation of modular construction in projects where offsite

would have been ideal. Discuss the ways that project financing can be changed to allow offsite construction, and any

obstacles to this. For example: Identify stakeholders in the financing process, and how they can be better informed. How

can research contribute to restructuring?

Comments:

A key advantage of modular and offsite construction is the predictability of cost and schedule, how can this be sold as

reducing risk and establishing new ways of paying people?

Ownership for modular and offsite construction needs to be redefined, i.e., when does the building belong to the client?

And how are progress payments made? The design‐build method provides a rough framework for a possible solution.

Alberta Infrastructure was also examining various possibilities for solving this issue, including having yard storage time

limits and bonding schemes.

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5.0 SUMMARY AND RECOMMENDATIONS:

The workshop served as a platform for members of industry and academia to discuss issues and

challenges confronted in an effort to expand and advance the utilisation of Canadian modular

construction.

Participants reached a general consensus during the presentations, discussions, and deliberations that

an opportunity exists for the modular industry to expand a great deal into the construction market. In

order to do so, the following recommendations need to be considered:

First, to collaborate with and support the public sector to act as prominent owners, and drivers behind

positive change. It has been historically proven that a substantial market shift, such as the one discussed

in this workshop, needs leadership and commitment from public owners, in consultation with

contractors, fabricators, material suppliers, and academics (experts). This enables changes in regulations

and contractual agreements to take place, promoting innovation, value based procurement systems,

and more hybrid construction.

The second major recommendation is for industry leaders and academics to study heavy industry and

other applications where modular construction has been employed for some time. The iterative

improvements and advances made in these areas can provide direction for the remainder of the

modular construction industry.

The third recommendation is for an increase in pilot projects that utilize advanced modular and offsite

techniques. Government bodies should initiate such exemplar projects in the education, public health,

and social housing sectors, in collaboration with industry leaders and academics, to provide examples

and techniques for future modular construction.

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6.0 ADDITIONAL INFORMATION

6.1 KEYNOTE ADDRESS OF THE DEAN OF ENGINEERING, CONCORDIA UNIVERSITY, DR. AMIR ASIF

Dean Asif received both his Masters and PhD degrees from Carnegie Mellon University, Pittsburgh,

Pennsylvania. He previously served as a faculty member at Carnegie Mellon University, Simon Fraser

University, and York University, where he was the founding departmental chair of the Department of

Electrical Engineering and Computer Science enabling the formation of Lassonde School of Engineering.

His research interests are in signal processing with applications in medical devices, radar and sonar

applications, and power distribution systems.

ADDRESS:

“As the engineering profession continues to evolve, universities and industry in North America and

beyond face the challenge of maintaining their role as world class institutions training highly qualified

professionals in next‐generation technologies and engineering fields such as Modular Construction—the

theme of the workshop. University‐industry collaboration is vital to develop products that meet society

needs. Such industry‐sponsored university research is often developed into practical applications that

benefit society. Indirectly, university‐industry partnerships spawn new industries that enhance the

North American competitive advantage globally.

Most infrastructure around the world requires constant maintenance and refurbishment. In the

Canadian context, the infrastructure, roads, bridges, and buildings require a major overhaul. The theme

of industrialized modular construction is, therefore, very timely as modular construction aims to address

the infrastructure challenges. Modular construction is a need of the global society, providing many

advantages over conventional construction. Modular construction allows for the buildings and the site

work to be completed simultaneously reducing the overall completion time. Assembly itself is

independent of weather, increasing work efficiency. While waste from a site‐built dwelling may typically

fill several large dumpsters, construction of a modular dwelling generates much less waste and is

environmental friendly. Modular construction reduces waste and site disturbance compared to site‐built

structures. I sincerely believe that workshops such as this enables researchers to get together,

collaborate with industry, and develop environmental, sustainable, and economical solutions that

benefit all.

At Concordia, we pride ourselves on being problem solvers. We have a strongly committed cohort of

about 200 professorial faculty members pursuing cutting‐edge research and providing outstanding

education to over 7,500 undergraduate and graduate students. We have an incredibly balanced

undergraduate to graduate student ratio of almost 1:1. The programs offered by Concordia cover all

engineering domains, including civil engineering, building engineering, environmental engineering,

electrical engineering, computer engineering, mechanical engineering, industrial engineering, software

engineering, and aerospace engineering. All of our engineering programs are accredited for the

maximum duration by the Canadian Engineering Accreditation Board. Our students are highly sought

after and recognized by both industry for their skills and exceptional training, and universities as

P a g e | 18

Workshop Report: “Challenges and Opportunities for Modular Construction in Canada” prospective graduate students and faculty members. For the last several years, our enrolment has been

growing steadily between 15 and 20 per cent annually. We continue to attract top students from all over

the world, not only from Canada. And we have wonderful teaching and research facilities, among the

best in the country. If you have some time during or after the workshop, I invite you to visit Concordia

(only a few blocks from here) and see for yourself some of our teaching and research facilities. It is an

honour for Concordia to be part of this wonderful workshop. Whether we belong to academia, industry,

public or private sector, our research and design activities push boundaries because we look to our

communities for inspiration. That is what you will all be doing here today. Reaching as a community you

will all be looking at what is working and what needs to be improved in modular construction. The

challenges you face are not small: infrastructure aging problem in Canada is something we are all very

familiar with irrespective of the part of the country we belong to. The extreme Canadian climate poses

another challenge and our infrastructure should be immune to extreme swings in weather conditions.

Geographically distant and isolated regions pose another challenge. The size of our country and our lean

population density means that we are spread out. We need to transport materials over great distances

and to remote locations on a regular basis. In recent years, most institutions in Canada have faced

considerable fiscal challenges, which means that we must stay lean as an institute and yet continue to

contribute in the development of next generation engineering technologies and structures. Despite

these challenges, I have full confidence in the abilities of engineers, especially Canadian engineers, to

continue to lead and contribute towards developing solutions for the societal needs in the coming years

and decades.

It is with this promise that I wish you a very successful workshop and look forward to learning more

about modular industrialized construction by virtue of the findings of this workshop through its

proceedings.”

6.2 FURTHER READING Ryan E. Smith and the Modular Building Institute Foundations (2015). Permanent Modular Construction: Process, Practice, Performance. Available at: http://www.modular.org/HtmlPage.aspx?name=foundation_offsite_PMC_report

‐ This paper discusses several international projects that utilize permanent modular construction (PMC), as case studies to examine the processes involved, and outcomes, and compare the off‐site processes to traditional construction methods.

Other Modular Building Institute Resources, available at: www.modular.org

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APPENDIX A LIST OF ATTENDEES

Invitee Name AffiliationAcademic Participants

Ying‐Hei Chui University of New Brunswick

Zhenhua Zhu Concordia University

Lloyd Waugh University of New Brunswick

Jeff Rankin University of New Brunswick

Yuxiang Chen University of Alberta

Neil Eldin University of Houston

Raymond Issa University of Florida

Amin Hammad Concordia University

Farnaz Sadeghpour University of Calgary

Simaan AbouRizk University of Alberta

Tarek Zayed Concordia University

Talal Amhadi Concordia University

Mojtaba Valinejadshoubi Concordia University

Jeff West University of Waterloo

Carlo Carbone Université du Québec à Montréal

Ashutosh Bagchi Concordia University

Avi Friedman McGill University

Hossein Abaien Concordia University

Tarek Salama Concordia University

Industry Participants

Martin Tite GRC Architects

Tony Begin Canam Group INc

Pierre Boucher Canadian Construction Innovations

Laurie Robert NRB Inc

Rick Weste Triple M Housing Ltd

Jacques Roy Maple Leaf Homes Inc

Kathleen Maynard Canadian Manufactured Housing Institute

Peter Lister FPInnovations

John Bockstael Bockstael Construction Ltd

Gilles Bernardin Defence Construction Canada

Christian Daniel Asiminoaie CANAM Buildings

Marc Lapointe Société d\'habitation du Québec

Chantale Germain Hydro‐Québec

Paul Verhesen Clark Builders

Ray Girouard Kent Homes

Steven Williams MBI

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Pierre Lapointe FPInnovations

David Saucy Kent Homes

Pierre Larouche Lemay

Bill Haliburton ATCO Structures & Logistics

Brian Keyes GLP Canada

Dino Zuppa NSERC

Tim Smith Ellis Don

Michelle Patchett Ellis Don

George Charitou Ellis Don

Sandra Nigro MHA

Dupuis Roger Kent Homes

Shawn Gardner Public Works Canada

Les McMullan HATCH

Randy McGee Defence Construction Canada

Subhi Alsayed Tridel Homes

Pierre Collot ETS‐GRIDD

Stephen Coote CCI / Group 92 Mechanical Inc

Julian Bowron VectorBloc

Nagima Essop PCL

Guy Huot Hydro‐Québec

George Poumbouras Canam

Parisa Allahyari Hydro‐Québec

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APPENDIX B PROGRAM

Challenges and Opportunities for Modular Construction in ...€¦ · Challenges and Opportunities...

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